Date of this Version
The decision of the House of Lords in Salomon v Salomon & Co Ltd is considered the ‘classic authority’ for the proposition that a company has a separate legal personality. This principle’s application engenders polarised debate, specifically with regards to corporate groups. Such groups generally operate as a single economic unit, with management of the parent company overseeing each company in the group (including subsidiaries). In Salomon, the liquidator mounted a number of counter-arguments. This critique focuses on the argument that the company was always Salomon’s agent in conducting business. In doing so, this critique questions whether the liquidator’s argument has continued significance in light of the agency quasi-exception and the general application of Salomon to corporate groups.
This document has been peer reviewed.